Michael Nagle/Bloomberg via Getty Images
Key Takeaways
- The U.S. jobs market was surprisingly resilient last month. The economy created 228,000 jobs in March, despite expectations of a slowdown.
- The job market, usually a barometer of the health of the economy, is of less use than usual because of the seismic impact of President Donald Trump's tariffs announced in April.
- DOGE-related layoffs didn't make a dent in the report, which counted people as employed if they were receiving severance.
Employers hired more workers than forecasters predicted in March, indicating a more resilient job market than expected before President Donald Trump’s “Liberation Day”, tariff announcement shook the economic system.
The Bureau of Labor Statistics reported Friday that the U.S. economy created 228,000 new jobs in March. This is up from 117,000 revised downwards in February. The growth in jobs was far beyond the expectations of forecasters who had predicted 140,000 jobs. This is according to a Dow Jones Newswires/The Wall Street Journal survey of economists. It was the highest number of new jobs since December, and the most under the Trump administration. Despite the job gains, unemployment rose to 4.2%, up from 4.1%. It remained within the range that it has been hovering since May 2024.
The Friday report provided a final glimpse of the job markets before Trump’s announcement on Wednesday of steep tariffs on U.S. trading partner countries shook the financial world, changing the outlook and trajectory of the economy. The job market has remained resilient, despite the high borrowing costs (the result of Federal Reserve’s fight against inflation), and uncertainty regarding trade policy.
Lindsay Rosner wrote in a recent commentary that today’s better than expected jobs report will ease fears of a sudden softening on the U.S. Labor Market. “However, this number has become a side dish with the market just focusing on the entrée: tariffs.”
A recent announcement of tariffs may have made the jobs report less useful as a barometer for the health of the economy.
Jochen Stanzl is the chief market analyst of CMC Markets. He wrote in a comment that “In the past 48 hours, Trump’s tariff announcements have caused the cornerstones to global trade to shift so dramatically, that the employment statistics were already outdated before they were released,” “At this time, it is too early to tell how the jobs market in this new climate will develop. Even a quick glance at the March jobs market does little to help.”
Elon Musk’s DOGE cost-cutting team and its mass layoffs did not affect the March data which showed a loss of only 4,000 federal positions. A separate survey conducted by a private consulting group showed that more than 280,000 federal layoffs were announced in March and February. The Bureau of Labor Statistics counted people as employed if they received severance, possibly contributing to the lack of DOGE-related unemployment in the data.
